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If you believe the Wall Street sell-side orthodoxy, we've moved into a "stock picker's market."

That's because the returns of Standard and Poor's 500 stocks have begun to vary more widely from each other this year than in recent years when they were moving more in lockstep. The inference is that it's easier to beat the market during these periods of higher dispersion.

But according to Rick Ferri, an investment advisor and index-fund zealot, "There is no evidence to support the notion that active stock selection is easier when there is wide dispersion among individual stock returns."

Rick Ferri blog

He cites a new study, "Dispersion: Measuring Market Opportunity," by S&P Dow Jones, which suggests that the probability that actively managed mutual funds will outperform the market are no higher during periods of high dispersion than low dispersion.

According to study, dispersion gives us a way only to measure the potential value of stock selection ability.

Ferri writes that the study shows there is little relationship between large-cap U.S. actively managed fund success and dispersion of stocks in the S&P 500. "Although there is higher dispersion among active fund returns during periods of high stock market dispersion, this fund dispersion does not increase the likelihood of outperformance by active managers within the large-cap U.S. market segment."

I didn't need a study to understand that truth. Common sense should tell us that wide variance or dispersion among stock returns doesn't mean that we will have a better chance to beat averages. It might tell us that we have a better chance to vary from an average, but that greater variance can give the stock picker a result that is lower than a benchmark just as easily as it gives a result that is above the benchmark.

Writes Ferri: "It's often helpful to step back from the data and think about things logically. Why should there be a greater percentage of active fund managers who outperform during periods of high dispersion? Does skill increase during these periods? Are there more opportunities to outperform? I find these arguments suspect."

Meanwhile,
NetflixNFLX 2.4650412334169953%Netflix Inc.U.S.: NasdaqUSD114.31
2.752.4650412334169953%
/Date(1438376400321-0500)/
Volume (Delayed 15m)
:
15478583AFTER HOURSUSD114.6
0.290.25369608958096407%
Volume (Delayed 15m)
:
870488
P/E Ratio
257.04969642455586Market Cap
48696631068.103
Dividend Yield
N/ARev. per Employee
2494690More quote details and news »NFLXinYour ValueYour ChangeShort position
(ticker: NFLX) reported first-quarter results after hours Monday which were better than expected. The stock earned 86 cents a share, three pennies more than the Thomson Reuters consensus. The company also announced that it plans by July to increase its U.S. prices for new members by a dollar or two a month, from the current $7.99 a month level, after seeing limited impact from a price increase in Ireland.

Not surprisingly, the stock was up 7% on Monday evening, which comes after the stock has showed a nice rally starting last Wednesday. Before that, the stock had lost almost a quarter of its value over the previous month amid a downdraft for a number of glamor tech stocks.

Fortune

Among the arguments: "Most Netflix customers are happy with the service, according to the survey. Overall Netflix satisfaction levels are now at record levels, with 66% of current subscribers responding that they are either "extremely satisfied" or "very satisfied" with their service, up from 62% one year ago," the report states. In addition, "Netflix subscribers are increasingly less likely to leave the service, the survey found, with 69% of current subscribers "not at all likely" to cancel their subscriptions in the next three months, up from 66% one year ago."

As a satisfied Netflix customer who would gladly pay a buck or two more a month for the service, I buy the arguments of RBC Capital Markets.

New Yorker

"The selloff can be explained to some extent as a market correction and part of a wider flight from risk," he adds. But the real story, he contends, is that government could eventually step in to lower prices of expensive medications. He cites the example of revolutionary new hepatitis-C drug, Sovaldi, developed by Gilead. "A single dose of the drug costs a thousand dollars, which means that a full, twelve-week course of treatment comes to more than eighty grand," he adds.

"Biotech, in other words, may become the victim of its own success: the bigger the profits, the bigger the likelihood of regulation," Surowiecki writes. "The uproar over Sovaldi may, somewhere down the line, help contain drug prices. But in the short run it could well make drugs even more expensive. And that's what you call a serious side effect."